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2023 WealthVantage August Market Outlook & Review

Malaysia and global market summary for August 2023.

World Updates

  • US corporate earnings fell slightly by 0.5% although overall sales increased by 0.7%, above quarter-end expectations

  • Ratings agency Fitch downgraded the US credit rating from AAA to AA+ on 2nd August due the concern about the country’s potential fiscal deterioration over the next 3 years

  • Bank of Japan has begun phasing out its 7-year-old yield curve control program

  • Japan has started releasing treated radioactive water from the devastated Fukushima nuclear power plant, with China responding by banning seafood from Japan

Malaysia Economy Update

  • The 6-state election results showed that the PH-BN coalition has maintained a solid majority in Penang, Selangor, & Negeri Sembilan while PN continues to hold over Kedah, Terengganu & Kelantan

  • US Dollar weakened slightly against the Ringgit in July by 2.51% to USDMYR 4.50 as 31ST July 2023, compared to USDMYR4.60 as of 30 June 2023

  • Malaysian economy expanded moderately in the second quarter of 2023 (2.9%; 1Q 2023:5.6%) mainly due to slower external demand

  • Headline inflation continued to moderate to 2.8% (1Q 2023: 3.6%)

US Update

  • US restricts particular US investments in sensitive technology in China

  • Increasing concerns over the US debt ceiling crisis during the first 2 months of the quarter

  • US mortgage applications for home purchases fell 5% to 142, the lowest since 1995

  • Business activity stagnated with its weakest growth since February that it fell to 50.4 in August

China Update

  • China’s inflation rate fell into negative territory for the first time since 2020

  • China has more stronger stance on the yuan in supporting its market as it provided a sense of relief for assets in developing countries

  • Country Garden, which was once China’s largest property developer faces risk of default which JPMorgan estimates could also lead to $8 billion worth of defaults among remaining smaller Chinese property developers.

2023 August Market Outlook Update

Sticky inflation will remain an ongoing concern for the global markets. But inflation is likely to have peaked due to the tightening stance of global central banks alongside the lag effects of monetary policy on the economy. While it may take some time for policy normalisation and inflation to lower, the global outlook remains steadfast. Short-term volatility will likely prevail and a diversified approach to investing with exposure to attractive segments globally remain the way forward.

Information for educational purposes only.

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